Advantageous Selection in Crop Insurance: Evidence from the Philippines
نویسندگان
چکیده
We examine the existence and identify the sources of advantageous selection in the Philippine crop insurance program for corn. Out of the many potential sources considered, we find that using hybrid instead of genetically modified seeds is a source of advantageous selection in this market as farmers who use hybrid seeds purchase more insurance and are also more productive. We also find that farmers with higher historical yield, without land ownership and who specialize in corn production are more productive and farmers with higher cognitive ability, being a member of an organization and lower wealth purchase more insurance coverage. Policy implications of our findings are also discussed.
منابع مشابه
Identifying Information Asymmetries in Insurance: Experimental Evidence on Crop Insurance from the Philippines
Why have insurance markets for many important risks failed to develop? Economic theory suggests this is most likely due to asymmetric information problems, but their presence is hard to identify empirically. In this paper I provide empirical estimates of information asymmetries in the insurance for crops, a market that has failed to develop for the most important types of natural hazards to cro...
متن کاملFarmers Willingness to Pay for Crop Insurance: Evidence from Eastern Ghana
Crop insurance is a risk management tool with the potential of dealing with risk more efficiently, the study uses a dichotomous contingent valuation method to elicit the willingness to pay for crop insurance among cereal farmers in the Eastern region of Ghana. The study employed descriptive statistical techniques to analyse primary data obtained from 208 sampled farmers in the region. Approxima...
متن کاملExperimental Identification of Asymmetric Information: Evidence on Crop Insurance in the Philippines
Asymmetric information imposes costs on a wide range of markets and may explain why some important markets, such as most agricultural insurance markets, have failed to develop. It is hard to empirically identify the different dimensions of asymmetric information but doing so is crucial for improving efficiency and solving market failures. I develop a new experimental methodology and apply it to...
متن کاملDoes Selection in Insurance Markets Always Favor Buyers?
This paper provides empirical evidence of advantageous selection in insurance markets. By using a novel insurance setting where moral hazard is not a concern, I am able to overcome an important obstacle in most studies of selection: the inability to distinguish moral hazard from selection. In the US market for area yield crop insurance, payouts are based on average county yields. Moreover, area...
متن کاملSources of Advantagenous Selection: Evidence from the Medigap Insurance Market∗
We find strong evidence for advantageous selection in Medigap insurance market. Using Medicare Current Beneficiary Survey (MCBS) data, we regress total medical expenditure on medigap status and other controls. We find that (1) if we only use gender, age and State (three variables used in the pricing of Medigap), then those with Medigap incur about $4,000 less in total medical expenditure than t...
متن کامل